Investing During Market Volatility: El-Erian's Six Rules

Mohamed El-Erian, chief economic adviser at Allianz SE and chairman of President Barack Obama’s Global Development Council, offers six “rules” for investing during the current market volatility, an environment he suggests will remain for some time.

  1. “Be on the lookout for good [company’s stocks] trading at really cheap values.”
  1. “Use the periodic bouts of sharp market rebounds to trade up in quality.”
  1. “Use measured investing techniques . . . when taking on added exposure to fundamentally disrupted market segments that are subject to high mark-to-market risks.”:
  1. “For now, think of cash as part of the strategic (and not just tactical) allocation in a diversified portfolio.”
  1. “Continue to look for opportunities that have not been directly affected by central bank liquidity injections.”
  1. “Remember that obvious divergences in country fundamentals don’t always translate to commensurate financial market out-performance.”